By Patrick Henderson, Governor's Energy Executive

The recent op-ed published in the Patriot News (Stateline.org – "Is fracking the key to a reversal of fortune in PA?") correctly highlights the significant economic potential being realized in states like Pennsylvania, Texas and North Dakota from the shale gas that we are safely developing more than a mile beneath our feet.

Gov. Corbett has touted these benefits as playing a key role in his agenda of putting Pennsylvania on strong fiscal ground, providing a job for every Pennsylvanian, and helping to educate and train Pennsylvanians for the jobs of today and tomorrow.

However, the article fails to accurately characterize how both Pennsylvanians – and state government – are benefitting from this activity.

At its core, the op-ed projects the premise that states only benefit if they levy high tax rates, which discourage private capital investment and innovation. The op-ed also fails to accurately reflect the total tax revenue being realized by the state, and paints Pennsylvania as an outlier among oil and gas states.

As an example, the op-ed says that even Texas as a severance tax. However, the author fails to acknowledge that the 7.5 percent severance tax in Texas is discounted to less than 2 percent  in the first 7-10 years of a well’s life.

More importantly, the author fails to note that Pennsylvania collects revenue from a corporate net income tax, personal income tax, capital stock and franchise tax and others – all of which Texas does not have. North Dakota – cited as another example – has a corporate net income tax that is nearly 50 percent below Pennsylvania’s, as well as a lower sales tax rate.

Neither Texas nor North Dakota has an impact fee, which under Governor Corbett’s leadership is providing over $200 million to assist county and municipal governments offset costs associated with shale gas development.

In addition to the impact fee, oil and gas operators have also paid nearly $1.7 billion in corporate taxes since 2006, including $303 million in just six months this fiscal year. This does not include the taxes paid by the nearly 240,000 Pennsylvanians who go to work each day in our oil and gas industry.

Only by evaluating the entire tax climate – and the revenue generated – can you gain a fair comparison. Unfortunately, the Stateline.org op-ed fails to do so.

We must also look beyond simply measuring the value of any industry by the taxes it pays. We need to look at the jobs created; the communities which are enhanced; and the families which are sustained. We also need to look at the positive impact shale gas development is having by lowering gas and electricity costs, saving the average Pennsylvania family nearly $1,000 a year and increasing the competitiveness of our businesses.

Gov. Corbett’s focus is on ensuring that shale gas is developed safely and responsibly, enhancing Pennsylvania’s business climate, and maximizing these benefits for all Pennsylvanians.

Patrick Henderson serves as Energy Executive in the office of Gov. Tom Corbett

2/11/2013